AUD/USD drops as Australian inflation stays above RBA target

AUD/USD came under selling pressure following the release of Australia's latest inflation data, which showed prices remaining stubbornly above the Reserve Bank of Australia's target band. The Trimmed Mean CPI printed at 0.8% q/q, slightly below the 0.9% consensus and prior reading, while the March monthly headline CPI came in at 4.6%, well above the RBA's 2-3% target range. Despite the quarterly trimmed mean reading missing expectations marginally, the overall inflation picture remains elevated, complicating the RBA's policy outlook and raising questions about the timing of potential rate cuts. The higher-than-target headline figure suggests persistent price pressures in the Australian economy, which paradoxically weighed on the Australian dollar as markets digested the mixed signals. Traders are reassessing RBA rate expectations, with the central bank likely to maintain its cautious stance at upcoming meetings. Near-term support for AUD/USD sits at the session lows, while resistance aligns with pre-data levels. The data underscores ongoing uncertainty for AUD traders navigating conflicting inflation signals.